Aug. 27 (Bloomberg) -- Vale SA, the world’s largest iron-ore producer, expects the steel-making ingredient to rebound
this year because current prices aren’t profitable for producers
in China and other countries.

Iron-ore below $120 a metric ton is a “short-lived”
situation, the company’s Investor Relations Director Roberto
Castello Branco told reporters at an event in Rio de Janeiro
today. Vale is not among the suppliers planning to reduce output
because it has low production costs, he said.

“The iron-ore price is below the cost for marginal
producers not only in China but also in other countries,”
Castello Branco said at the sidelines of the Platts SBB Steel
Markets in Latin America conference. “If you are a producer
with higher costs, you won’t continue producing at a loss; you
will stop your operations.”

Iron-ore fell below $100 for the first time since 2009 last
week on concern that rising stockpiles and slowing growth in
China, the biggest buyer, will cut demand for the raw material.
The decline pushed Vale shares to the lowest level in almost
three years.

BHP Billiton Ltd., the world’s biggest mining company,
expects “long-term” price declines for its commodities because
of a slower Chinese economic expansion, Chief Executive Officer
Marius Kloppers told the Inside Business program on the
Australian Broadcasting Corp. yesterday.

Vale dropped 1.6 percent to 33.39 reais in Sao Paulo, the
lowest level since Sept. 4, 2009. The stock is down 12 percent
this year.